One of the most controversial issues in health reform is the concept of an employer mandate—a requirement that most employers would either have to provide health insurance for their employees, or pay a percentage of total payroll costs to the government.

Currently, employer-sponsored insurance (ESI) provides coverage for 61 percent of the non-elderly population. In recent years, health insurance coverage has eroded, leaving 1 in 4 full-time workers without insurance sponsored through their employer.

Supporters of an employer mandate argue that it would spread the risk and cost of insurance among a larger population, and that requiring all employers to provide insurance would level the playing field for businesses. They also say a mandate would help reduce job-lock, where employees avoid changing jobs in order to maintain their current coverage benefits.

Opponents assert that a mandate on employers would burden businesses—especially smaller businesses—with additional expenses at a time when they are already struggling from a contracted economy. They say that increasing employers’ costs for mandatory benefits would lead to more job losses.

This Health Policy Brief explores the concept of an employer mandate and considers arguments both for and against it, and was published online on August 12, 2009 in Health Affairs.